# In the matter of SAFECO Hygiene Films Private Limited Inv. P.03-AHM-2021 In CP (IB) 96-AHM-2021

> NCLT judgment dated 2022-08-01. Citation: TCN-2022-NCLT-01508. Ayodhya Orchards LLP, the Financial Creditor, filed CP(IB) No. 96/AHM/2021 under Section 7 of…

- **Court:** NCLT
- **Order date:** 1 Aug 2022
- **Citation:** TCN-2022-NCLT-01508
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/safeco-hygiene-films-private-limited-inv-p03-ahm-2021-in-cp-ib-96-ahm-2021-095175f5

## Summary

### Background

Ayodhya Orchards LLP, the Financial Creditor, filed CP(IB) No. 96/AHM/2021 under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Safeco Hygiene Films Private Limited, the Corporate Debtor. Loganmoy Limited Mathesan Trust Company (BVI) Limited, a non-resident Indian shareholder holding 66% of shares in the Corporate Debtor, filed an Intervention Application (Inv. P. No. 03/AHM/2021) seeking various reliefs, including dismissal of the main application and imposition of penalty on the Financial Creditor. The Financial Creditor claimed default on a loan of Rs. 10,50,00,000/- advanced to the Corporate Debtor at 18% p.a. compound interest. The Corporate Debtor disputed the default, alleging

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## Facts

Ayodhya Orchards LLP, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Safeco Hygiene Films Private Limited, the Corporate Debtor. The Financial Creditor claimed that it had advanced an unsecured loan of Rs. 10,50,00,000 to the Corporate Debtor in financial year 2019-20 at 18% p.a. compound interest, repayable on demand. The Corporate Debtor repaid Rs. 2,13,78,936/- towards interest but failed to repay the entire loan by 31.03.2021, as assured. The Financial Creditor issued a recall notice dated 12.04.2021, delivered on 30.04.2021, and a reminder notice dated 12.05.2021. Loganmoy Limited Mathesan Trust Company (BVI) Limited, a shareholder holding

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency and …

**Ratio:** Section 7(5)(a) of the Insolvency and Bankruptcy Code, 2016, requires the Adjudicating

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**Reasoning:** The court found that the application was

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**Interpretation:** Section 7 of the IBC provides the procedure for initiating CIRP by a financial

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**Application:** The court found that the Financial Creditor's application was complete and met

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## Parties

- **Judges:** DEEPTI M…; Ajai Das Me…
- **Appellants:** Ayodhya Orchards…
- **Respondents:** SAFECO HYGIENE…

## Timeline

- **2019-20-01 — Loan Advan…**: Financial Creditor advanced an unsecured loan of Rs. 10,50,00,000 to the Corporate Debtor…
- **2021-03-31 — Repayment As…**: Corporate Debtor assured that it would repay the entire loan by this date, but no payment…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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